Taxes Impacting Residential Property Owners


Since you may not be an excluded owner, a tax return may be required to be filed and the property may be subject to tax.  Both the tax return and payment of applicable tax (if any) are due by April 30th following the relevant calendar year.  The following information is required to complete the return and calculate whether tax is owing.  Please email us a complete list of information, or confirm with us that you will have yourself or someone else prepare the required returns (please note that a separate return must be filed for each property by each title holder):


  • The name(s) of the owners listed on the Legal Title to the residential property;

  • If you are an individual who is not a Canadian citizen or permanent resident, of what country are you a citizen?;

  • Full address of the property;

  • Property ID used in the land registration system;

  • The type of property (Detached house, duplex, triplex, semi-detached house, townhouse unit or residential condominium unit);

  • What year did you become the owner of the property;

  • Are there any co-owners?  If there are, please provide their names and percentage of ownership;

  • What is the assessed value of the property?  This can be found on your latest property tax notice.  Note that it may be beneficial to use an alternative valuation method for the purposes of determining the tax.  If you believe, the assessed value of the property as per the property tax notice is greater than the fair market value, please contact us to discuss in more detail;

  • What was the latest sale price of the property?  If you can’t find this, you may have to determine it using third party sources.

  • Is the property in a designated area?  This is generally an area outside of a large urban area of the province.  Please use this link to determine if this applies. This tool can let you know if the property is in an area that has a blanket exemption.  A return must still be filed;

  • Is the property accessible for the whole year?; and

  • Please described the use of the property: 

    • Who lived at the property,

    • Their relationship to the owner,

    • Were they paying rent? and

    • What parts of the year did they live there?



The following are the various exemptions that can remove the obligation to pay tax on the residential property:


Type of Owner:


No tax applies if the residential property is owned by a:


  • Specified Canadian corporation – This is a Canadian corporation where non-permanent residents/non-citizens own or control, directly or indirectly, shares of the corporation representing less than 10% of the votes or value of the company;

  • Partner of a specified Canadian partnership – This requires that every member of the partnership is an excluded owner or a specified Canadian corporation;

  • Trustee of a specified Canadian trust – This requires that each person with a beneficial interest in the trust is an excluded owner or specified Canadian corporation;

  • New owner in the year; and

  • Deceased owner, or personal representative of a deceased owner.

Availability of the Residential Property:


No tax applies if the residential property is:


  • Newly constructed;

  • Not suitable to be lived in year-round, or is seasonally inaccessible; or

  • Uninhabitable for a certain number of days because of a disaster or hazardous conditions, or renovations.

There is a property designation tool on CRA’s website that can be used to determine if your property is in an area that has an exemption.  These are normally areas that are a certain distance away from an urban area.


Exemption based on the occupancy of the resident:


Tax does not apply if the owner of the property is an individual and the property is used as a principal residence by the owner, their spouse or common law partner, or a child who is attending school.


Tax does not apply if there is a qualifying occupancy of at least 180 days.  This includes:


  • An arm’s length tenant for at least one month under a rental agreement.  This will cover situations where the property is rented to a third party for periods longer than a month at a time and for at least 180 days in total;

  • A non-arm’s length tenant who occupies the property for a period of at least a month and who pays fair value rent for the property;

  • An individual who is the owner of the property or the owner’s spouse or common law partner, who is in Canada working under a work permit and who occupies the dwelling in relation to that purpose. This only applies if the owner is an individual; and

  • An individual who is a spouse, common law partner, parent or child of the owner and who is a citizen or permanent resident.  This only applies if the owner is an individual.


These are the most common exemptions and should apply in the majority of situations however, there could be less common exemptions that could apply.  If you think you may apply for an exemption, but do not fit into any of the exemptions previously listed, please contact us to discuss




If a return is required and it is filed late, the late filing penalty is calculated as the greater of:

  • $5,000 for individual owners and $10,000 for non-individual owners (such as a corporation); or

  • The total of:

    • 5% of the tax payable; and

    • 3% of the tax payable multiplied by the number of complete calendar months that the return is past due

If the return is not filed by December 31st of the following year, the late filing penalty could be calculated without the benefit of certain exemptions.  Therefore, even if there is no tax owing on the returns, the penalty is calculated as if there was tax owing.


Next Steps:


Please consider whether your property has a filing requirement.  If it does, please make sure that the required tax return is filed by April 30th.  If you have questions about the form or need assistance, please contact your Kraft Berger advisor for assistance.


Canada Revenue Agency’s website includes the tax return and related instructions. Additional information can be found here: